The Federal Reserve controls the money supply by directing banks to either create or extinguish certain lines of credit.

Name: The Federal Reserve controls the money supply by directing banks to either create or extinguish certain lines of credit.
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Question

Quizplus · Accepted Answer

The Federal Reserve influences the money supply primarily through open market operations, the discount rate, and reserve requirements, not by directly directing banks to create or extinguish lines of credit.

The Federal Reserve Controls the Money Supply by Directing Banks